Kansas Debt Collection Firm Sued by Arkansas AG Over Illegal Payday Loans
The Arkansas Attorney General filed a lawsuit Monday against a debt collection agency after it refused to cooperate fully with two Civil Investigative Demands concerning the agencyâ€™s payday loan collection practices.
Attorney General Dustin McDanielâ€™s lawsuit against Kansas-based National Credit Adjusters LLC asks the Pulaski County Circuit Court to compel the debt collection agency to respond fully to the Attorney Generalâ€™s investigative requests. The requests are seeking to determine the extent to which the agency is attempting to collect old debts on payday loans, which are illegal in Arkansas (â€śMcDaniel Sues Collection Agency Over Data on Payday Loan Debt Collections,â€ť Office of the Attorney General of Arkansas press release, June 20, 2011).
According to the lawsuit, National Credit Adjusters buys the right to collect delinquent consumer debts from original creditors and third-party debt owners. The agency claims to own accounts purchased from several payday lenders, including Ace Cash Express, Advance America, BMG Accounts, Cash Central, Cash Net, Check into Cash, Check N’ Go, FNS Payday Loans, Global Payday, Internet Payday, Internet Payday Loans, Rapid Cash for You, and Sonic Cash Payday Loans.
The Attorney Generalâ€™s lawsuit maintains that debts from these payday lenders are not enforceable under Arkansas law and that collecting those debts is unlawful since the loans themselves were illegal to begin with.
“We have successfully stopped usurious storefront payday lending in this state, and to date we have also shut down more than 30 online payday lenders, yet the ripple effects from this illegal business continue to harm Arkansas consumers,” McDaniel said in a statement.
“Our office will continue its effort to prohibit activities related to payday lending, whether it’s by pursuing online payday lenders or a company like this, which is trying to collect on debts that were illegal in the first place.”
McDanielâ€™s lawsuit also asks the court to prohibit National Credit Adjusters from collecting debts in Arkansas until it fully complies with the investigative demands, answers all questions, and provides all documentary evidence.
Arkansas consumers who are having problems with debt collection companies that are trying to collect on a payday loan are encouraged to file a complaint by calling the Attorney General’s Consumer Hotline at (501) 682-2341 or (800) 482-8982 or by visiting www.arkansasag.gov/contact_us_consumer_complaint_form.html.
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